Coworking no longer quite so communal

The character of coworking spaces is changing across Sydney and Melbourne as larger corporate tenants move into spaces once typified by digital nomads working alone at desks in a shared space.

Data from Office Hub, an online marketplace for flexible office space that operates across Australia and several Asian countries, showed a 105 per cent increase in the number of businesses with 15 or more employees looking for coworking space in 2017-2018.

Grant Philipp predicts the language of 'coworking' will not keep up with a changing reality.Credit:Jessica Hromas

Grant Philipp, Office Hub's founder and chief executive, said the change was so marked that the term 'coworking' had become a misnomer for many spaces sold under the label.

"The average punter is ingrained to think that coworking is open plan, working with other people," Mr Philipp said. "But then you've got [major coworking operators] WeWork and Christies and all these guys saying coworking is a closed office in a shared space, but it's not. That's a serviced office."

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Office Hub helped over 6,000 companies looking for flexible workspace last year, booking an average of just over three desks per deal that closed.

Colliers International property expert Rowan Humphries said most of the space at new coworking developments was comprised of private suites.

"They're about 70 per cent suites, and that might be for one person suites up to 60, 70, 100 person suites. They're growing in size as the market matures," Mr Humphries said.

Mr Humphries said the change was driven by demand for larger companies to have their staff in coworking spaces.

Coworking spaces offer larger businesses the opportunity to increase or decrease their office footprint in response to market conditions, expand quickly into new regions and project different brands for different teams.

WeWork, the most prominent global coworking company, is getting more of its business from businesses.Credit:Bloomberg

Microsoft, for example, has a team at space run by WeWork in the Sydney CBD in addition to its much more traditional Sydney headquarters in North Ryde.

And Palantir, the secretive US technology company which has developed controversial predictive policing systems, rents space at another coworking building in the city's inner east.

Major businesses like Palantir and Microsoft can have their teams in coworking spaces only because they are no longer predominantly open-plan.

Instead, many contain discrete offices with lockable doors, their own IT networks, phone systems and conference rooms.

In many ways, Mr Humphries said coworking providers like WeWork were on a path to convergence with serviced office providers like Dexus and Regus, which have introduced swish turnkey suites into some of their properties.

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"[Serviced offices] have evolved to be a lot more to be a bit more like coworking and coworking has evolved to be a lot more like a serviced office," Mr Humphries said.

And the amount of flexible space in both categories grew rapidly last year, up 46 per cent over 2017, according to data from Colliers.

But Mr Philipp said he did not expect the term coworking to disappear any time soon because of the negative connotations surrounding serviced offices.

"You're actually a serviced office but they don't want to say it," Mr Philipp said. "The term is on the nose."